00:00We just got the new figures from the ABS which show that inflation ticked up in September
00:07and that the numbers in today's data are still too high.
00:11Headline inflation up 4.3% in the year to the month of September compared to 4% in August.
00:18Trimmed mean was 3.6% in the year to September, was 3.5% in the year to August
00:24after the revision.
00:25In the quarterly data, headline inflation unchanged at 3.9% through the year.
00:31Trimmed mean was 3.7% compared to 3.6% in the quarter before it.
00:37Inflation has increased in every major advanced economy in September
00:42and that's why the markets are expecting rate rises in all of them.
00:47Annual inflation has been increasing more in other countries than here
00:52but we know that this doesn't make it any easier for Australian families
00:56and Australians more broadly who are under pressure.
00:59We already had an inflation challenge in our economy
01:03and the war in the Middle East is making it worse.
01:05We've seen higher oil prices driving higher inflation around the world
01:10and today's figures confirm that we are not immune from that.
01:14And that's why once again from an economic point of view
01:17the end of the war in the Middle East can't come soon enough.
01:21If you look at the specific drivers of the inflation numbers we've just received
01:27the single biggest driver of higher headline inflation was higher fuel prices.
01:33Automotive fuel was up 9.4% in the month
01:36and that makes it 23.6% higher through the year
01:41and we expect October to be that trend continued, in fact worsened.
01:47If you look at the global Brent futures price
01:50averaging $107 per barrel in October and higher today
01:55compared to $102 per barrel in September.
01:59Remember that the futures had around $70 per barrel before the conflict
02:04and $60 a barrel at the start of the year
02:07and so that does give you a sense of one of the big drivers of inflation in our economy.
02:13If you look at another interesting element of the numbers today
02:18electricity prices in the CPI fell 0.8% in the month.
02:23That means since the month of June they've fallen by 2.4%.
02:28So inflation is much lower than it was in 2022
02:33but it is still much higher than we would like.
02:35That's the reality of it.
02:37And budgets aren't the primary driver of prices in our economy
02:42but we can and intend to continue to play a helpful role
02:45in the fight against inflation.
02:48That's why we found $180 billion in savings.
02:51It's why the last budget had a record amount of savings
02:54more than $60 billion in savings in one budget.
02:58It's why we've been able to manage the budget in a much more responsible way
03:04than it was being managed by our predecessors.
03:09If you think about the contribution being made by the public sector and the private sector
03:15in the last financial year, if you compare that to the year before
03:18public demand growth in our economy halved while private demand growth tripled
03:23and that tells you that there are other factors at play
03:27including the global factors that Secretary Wilkinson and Governor Bullock
03:32have been talking about through the course of today.
03:37For every $5 of demand in our economy, $4 is private and $1 is public
03:43and I think that's an important bit of perspective
03:47when it comes to some of the commentary that is around today.
03:52If you think about comparing this time of this year compared to this time last year
03:58the additional inflationary pressures have come from two sources.
04:02In the first instance, Secretary Wilkinson said this morning
04:06a much faster than expected recovery in the private economy
04:11towards the end of calendar 25 and into the beginning of 26
04:14and then obviously the biggest oil shock on record
04:19with the beginning of the war in the Middle East.
04:24And so that is also, I think, an important perspective.
04:28We accept our part in the fight against inflation.
04:33We take responsibility for government policy
04:35when it comes to the fiscal settings
04:38and when it comes to managing the budget in a responsible way
04:41in the face of this inflation challenge
04:44which is persisting longer than anyone would like.
04:47And that's why the next budget update in December
04:51will have a savings package in it
04:53just like the first eight budgets and budget updates had as well.
04:58In every single one of our eight budgets and budget updates
05:00we've had a savings package.
05:02There will be one in the ninth as well
05:04and the government is working to finalise that
05:07to release a closer to the end.
